African Leaders Want Continent’s Natural Assets Worth Trillions of Dollars to be Part of Measuring GDP of Countries
African heads of state and government are calling for the continent’s vast natural capital to be considered when measuring the Gross Domestic Product (GDP) of their countries.
In a communique adopted on Wednesday 13 November on the sidelines of the World Leaders’ Summit of the 29th Conference of the Parties (COP29) in Baku, they emphasized the unique contribution to the world of Africa’s forests such as carbon sequestration, pollution control, retention of water and soil fertility.
The high-level meeting titled: Measuring the Green Wealth of Africa, was jointly convened by the President of the Republic of Congo Denis Sassou Nguesso, his Kenyan counterpart Dr William Ruto who was represented by the Prime Cabinet Secretary and Cabinet Secretary for Foreign and Diaspora Affairs Musalia Mudavadi, and the president of the African Development Bank Group Dr Akinwumi Adesina.
It was attended by President Paul Kagame of Rwanda, Zimbabwe’s President Emmerson Mnangagwa, and President Faure Essozimna Gnassingbé of the Republic of Togo.
President Sassou Nguesso said the African continent must make the best of its natural capital, that is neglected or ignored in national accounts. This, he said, should be integrated as part of a country’s wealth.
“We are doing useful work for Africa and the rest of the world, in contributing to the acceleration of the recognition of the environmental dividend,” he said.
Kenya’s President Ruto said at the heart of the leaders’ conversation is the need to “ensure that Africa’s ecosystem services such as carbon sequestration and pollution control are valued as global public goods.
He said, “by appropriately valuing our green wealth, countries can unlock financial flows into investments to boost our economies and even improve our credit ratings.”
President Paul Kagame of Rwanda said Africa is a key player in the fight against climate. “Unfortunately, Africa’s key obstacle remains access to climate finance.”
The Rwandan leader said he fully supports the bold agenda to measure the continent’s natural capital and added, “we are not asking for handouts but for the world to pay for something that has tremendous value for all of us.”
The leaders commended the African Development Bank Group for its leadership and dedication to finding innovative mechanisms to mobilize the required financial and technical support for natural capital accounting and measuring the Green GDP of African countries.
The Bank has produced a report on “Measuring the Green Wealth of Nations: Natural Capital and Economic Productivity in Africa”.
Adesina said the report sets out key actions to value and integrate natural capital in the measure of Africa’s GDP.
“Africa contributes significantly to global public good for tackling climate change with its vast resources of natural capital, its vast natural capital has been undervalued,” he pointed out.
This situation, he said, “makes Africa to be green rich but cash poor,” adding, “while the GDP of Africa was estimated at $2.5 trillion in 2018, this was 2.5 times lower than the estimated value of its natural capital, evaluated at $6.2 trillion, which partly includes some valuation of the ecosystem services.”
He said according to the Bank’s preliminary estimates and “based on very conservative assumptions… Africa’s nominal GDP in 2022 could have increased by $66.1 billion when adjusted for carbon sequestration only. That is more than the combined GDP of 42 African countries!”
The Bank Group chief expressed concern at what he described as ‘carbon grab’ where several African countries were giving away their vast amounts of land to carbon credits yet getting very little in return.
“While the price of carbon in Europe is high and could be as high as $200 per ton because of the strict EU Emission Trading Standards, carbon price in Africa could be as low as $3 to $10 per ton,” Adesina pointed out.
Consequently, Adesina said, Africa gets underpaid for carbon because its carbon sinks are undervalued.
Furthermore, “the sequestered carbon on the lands can no longer be used as part of the nation’s nationally determined contributions,” he said, “that means countries lose sovereignty over their lands.”
According to Adesina, “the ongoing carbon grab in Africa is a lose-lose proposition.”
In their communique, African leaders said they will work with other developing countries and regions of the world, including Latin America and the Caribbean, as well as Asia, in forging a strong global alliance to ensure the inclusion of natural capital in the GDP of nations.
